Pearle Vision v. P. ex rel. Brown
Filed 7/31/07 Pearle Vision v. P. ex rel. Brown CA4/1
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COURT OF APPEAL, FOURTH APPELLATE DISTRICT
DIVISION ONE
STATE OF CALIFORNIA
PEARLE VISION, INC., et al., Cross-Complainants and Appellants, v. THE PEOPLE ex rel. EDMUND G. BROWN, JR., as Attorney General, etc., et al., Cross-Defendants and Respondents. | D041969 (Super. Ct. No. GIC783135) |
APPEAL from order of the Superior Court of San Diego County, Wayne L. Peterson, Judge. Reversed and remanded with directions.
In this second appeal in this action by cross-complainants Pearle Vision, Inc. (Pearle), Pearle VisionCare, Inc. (Pearle VisionCare) (together, sometimes appellants), appellants assert that the court erred in sustaining cross-defendants the California Attorney General and the Director of the California Department of Consumer Affairs' (DCA) demurrer to their cross-complaint. That cross-complaint against the Attorney General and DCA asserted that Business and Professions Code sections 655 and 2556, as well as other code sections restricting relationships between opticians/optical retailers and optometrists violated, among other things, the commerce clause and due process clause of the federal Constitution. The Attorney General and DCA demurred to the cross-complaint, and the court sustained that demurrer without leave to amend and dismissed the cross-complaint.
On appeal, Pearle and Pearle VisionCare assert that the court erred in sustaining the Attorney General and DCA's demurrer because the cross-complaint properly alleged the challenged laws and regulations violated the commerce clause of the federal Constitution because they (1) discriminate against out-of-state optical retailers in both purpose and effect; (2) are unduly burdensome on out-of-state optical retailers; and (3) out-of-state optical retailers and in-state optometrists are "similarly situated" for purposes of a commerce clause analysis. Pearle and Pearle VisionCare also assert that the cross-complaint properly alleges a violation of the due process clause of the federal Constitution because Business and Professions Code section 655, as interpreted by the Attorney General and DCA, does not give parties such as Pearle and Pearle VisionCare fair notice of what practices are in violation of that section.
While this appeal was pending, in a case entitled National Ass'n of Optometrists & Opticians v. Lockyer (E.D.Cal. 2006) 463 F.Supp.2d 1116 (NAOO), the federal district court found that Business and Professions Code sections 655 and 2556, as well as some companion statutes and regulations, were unconstitutional because they violated the dormant aspect of the commerce clause. That decision is currently on appeal before the Ninth Circuit Court of Appeals.
The parties have now settled this case by agreeing that the constitutional claims raised in this action will be litigated in federal court by the Attorney General and the plaintiffs in NAOO, and that Pearle and Pearle VisionCare will abide by the final adjudication of that case. In conjunction with that settlement, the parties have stipulated to vacate the trial court's ruling sustaining the Attorney General and DCA's demurrer and dismissal of Pearle and Pearle VisionCare's cross-complaint, so as to avoid the danger of inconsistent rulings and the possibility of regulatory confusion in California. The parties assert that vacation of the superior court's ruling will also promote efficiency by having the issue litigated in a single forum.
We accept the parties' stipulation under Code of Civil Procedure[1]section 128, subdivision(a)(8) (section 128(a)(8)) and grant the parties' joint motion for vacatur of judgment.
DISCUSSION
Section 128(a)(8) provides in part:
"(a) Every court shall have the power to do all of the following: [] . . . [] (8) To amend and control its process and orders so as to make them conform to law and justice. An appellate court shall not reverse or vacate a duly entered judgment upon an agreement or stipulation of the parties unless the court finds both of the following: [](A) There is no reasonable possibility that the interests of nonparties or the public will be adversely affected by the reversal. [] (B) The reasons of the parties for requesting reversal outweigh the erosion of public trust that may result from the nullification of a judgment and the risk that the availability of stipulated reversal will reduce the incentive for pretrial settlement." (Italics added.)
Thus, in determining whether a stipulated reversal will be accepted, an appellate court must find: "[T]here is no reasonable possibility that the interests of nonparties or the public will be adversely affected; the reasons for the requested reversal do not outweigh the erosion of public trust resulting from such an action; and the stipulated reversal does not reduce the incentive for pretrial settlement." (Union Bank of California v. Braille Institute of America (2001) 92 Cal.App.4th 1324, 1328 (Union Bank);In re Rashad H. (2000) 78 Cal.App.4th 376, 380-381.) We make this determination on a case-by-case basis based on the papers submitted by the parties and our own review of the record. (Hardisty v. Hinton & Alfert (2004) 124 Cal.App.4th 999, 1007.)
After examining the appellate record and the stipulated settlement, we conclude that there is no reasonable possibility that the interests of nonparties will be adversely affected by the proposed reversal. ( 128(a)(8)(A); Union Bank, supra, 92 Cal.App.4th at p. 1329;In re Rashad H., supra, 78 Cal.App.4th at pp. 380-381.) The Attorney General, who represents the people of the State of California in this action, has agreed to the vacatur and will continue to represent the public's interest in the federal court action. The superior court judgment has no stare decisis effect, and thus its vacation will have no effect on entities other than Pearle and Pearle VisionCare.
Vacating the judgment also will not erode the public trust in the judicial system. Rather, "public trust in the courts is also enhanced by settlements of pending appeals and related litigation. . . . When lawyers responsibly settle litigation, public trust in the courts is advanced." (Union Bank, supra, 92 Cal.App.4th at p. 1331.) Additionally, the public expense engendered by the state and federal proceedings will be lessened as the Attorney General will only have to litigate one case.
The availability of the stipulated vacatur has enhanced, not reduced, the incentive for pretrial settlement. This appeal arose from a ruling sustaining a demurrer and dismissing a cross-complaint. As the stipulated vacation of the judgment came early in the litigation, not after a trial on the merits, this factor favors approval of the stipulation.
Because the parties' joint motion to vacate the judgment of the superior court dismissing Pearle and Pearle VisionCare's cross-complaint in this matter satisfies the requirements of section 128(a)(8), we accept the parties' stipulation and vacate the judgment.
DISPOSITION
The judgment dismissing Pearle and Pearle VisionCare's cross-complaint is vacated pursuant to the parties' stipulation. Upon remand, the superior court is directed to enter an order in accordance with this opinion. The parties shall bear their own costs on appeal.
NARES, J.
WE CONCUR:
HUFFMAN, Acting P. J.
AARON, J.
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[1] All further statutory references are to the Code of Civil Procedure.
